More than a decade after the OneCoin scam began, victims can now apply for compensation from a $40 million fund, the US Department of Justice announced. The OneCoin scheme, which operated from 2014 to 2019, defrauded up to 3.4 million investors worldwide, with losses totaling over $4 billion.
The scheme's founders, Ignatova and Karl Sebastian Greenwood, ran a global multi-level marketing network that sold a fraudulent cryptocurrency. The operation was based in Sofia, Bulgaria, and involved a network of promoters who solicited investments in exchange for fake tokens. Notably, the scheme did not involve any actual cryptocurrencies and was not based on any blockchain. The DOJ has described the scheme as 'one of the largest global fraud schemes in history.' The scheme collapsed in 2017 after Ignatova and her team were found to have manipulated the perceived value of OneCoin.
In June 2024, the DOJ offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen.' Greenwood has since admitted to federal wire fraud and money laundering charges. According to US Attorney Jay Clayton, 'OneCoin's founders sold a lie disguised as cryptocurrency, costing victims more than $4 billion worldwide.' The DOJ has stated that it will continue to work to seize criminal proceeds and prioritize returning money to victims. This development comes after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors, as part of a broader effort to recover assets for users of the collapsed crypto trading platform.